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GuruFocus has detected 4 Warning Signs with Coca-Cola European Partners PLC $CCE.
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Coca-Cola European Partners PLC (NYSE:CCE)
Beneish M-Score
-2.05 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Coca-Cola European Partners PLC has a M-score of -2.05 signals that the company is a manipulator.

CCE' s Beneish M-Score Range Over the Past 10 Years
Min: -4.66   Max: -2.05
Current: -2.05

-4.66
-2.05

During the past 13 years, the highest Beneish M-Score of Coca-Cola European Partners PLC was -2.05. The lowest was -4.66. And the median was -2.56.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Coca-Cola European Partners PLC for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.053+0.528 * 0.9462+0.404 * 1.2539+0.892 * 1.4232+0.115 * 1.4249
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2148+4.679 * -0.0385-0.327 * 0.6862
=-2.05

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $1,962 Mil.
Revenue was 2747.89029536 + 3351.29068462 + 2478.67865169 + 1487.72383073 = $10,066 Mil.
Gross Profit was 1148.73417722 + 1303.03030303 + 905.421348315 + 549.192650334 = $3,906 Mil.
Total Current Assets was $3,613 Mil.
Total Assets was $19,586 Mil.
Property, Plant and Equipment(Net PPE) was $4,212 Mil.
Depreciation, Depletion and Amortization(DDA) was $410 Mil.
Selling, General & Admin. Expense(SGA) was $2,961 Mil.
Total Current Liabilities was $3,958 Mil.
Long-Term Debt was $5,867 Mil.
Net Income was 12.6582278481 + 367.003367003 + 170.647191011 + 64.7260579065 = $615 Mil.
Non Operating Income was -4.2194092827 + -1.12233445567 + -2.51573033708 + -1.96102449889 = $-10 Mil.
Cash Flow from Operations was 273.206751055 + 726.150392817 + 258.065168539 + 120.625835189 = $1,378 Mil.
Accounts Receivable was $1,309 Mil.
Revenue was 1716.42810458 + 1838.38383838 + 1929.25476992 + 1588.65367965 = $7,073 Mil.
Gross Profit was 636.901960784 + 701.459034792 + 705.459034792 + 553.253246753 = $2,597 Mil.
Total Current Assets was $2,039 Mil.
Total Assets was $7,583 Mil.
Property, Plant and Equipment(Net PPE) was $1,913 Mil.
Depreciation, Depletion and Amortization(DDA) was $277 Mil.
Selling, General & Admin. Expense(SGA) was $1,713 Mil.
Total Current Liabilities was $2,149 Mil.
Long-Term Debt was $3,395 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(1962.02531646 / 10065.5834624) / (1309.21895425 / 7072.72039253)
=0.19492415 / 0.18510826
=1.053

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(2597.07327712 / 7072.72039253) / (3906.37847889 / 10065.5834624)
=0.36719581 / 0.3880926
=0.9462

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (3612.86919831 + 4212.02531646) / 19586.4978903) / (1 - (2038.55555556 + 1913.01416122) / 7583.30827887)
=0.60049548 / 0.47891216
=1.2539

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=10065.5834624 / 7072.72039253
=1.4232

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(276.647749672 / (276.647749672 + 1913.01416122)) / (409.806259311 / (409.806259311 + 4212.02531646))
=0.12634268 / 0.0886675
=1.4249

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(2960.85899784 / 10065.5834624) / (1712.65328825 / 7072.72039253)
=0.29415672 / 0.24214916
=1.2148

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((5867.08860759 + 3957.80590717) / 19586.4978903) / ((3394.60457516 + 2149.15250545) / 7583.30827887)
=0.50161568 / 0.73104731
=0.6862

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(615.034843769 - -9.81849857433 - 1378.0481476) / 19586.4978903
=-0.0385

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Coca-Cola European Partners PLC has a M-score of -2.05 signals that the company is likely to be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Coca-Cola European Partners PLC Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.00390.99952.23270.83770.84581.06091.03860.99311.0231.0866
GMI 1.03561.033410.99871.00991.01681.03210.96880.98140.9433
AQI 1.00270.55341.53261.030.95251.0131.03860.96431.02751.2539
SGI 1.05451.01280.31321.00711.25940.95131.01831.02860.83361.3791
DEPI 0.96310.94661.11221.2180.84460.9981.08930.90271.02671.4654
SGAI 0.96370.99060.79641.01380.96921.01470.96980.99681.02791.2155
LVGI 0.94341.48960.38521.55371.12611.06861.09211.11631.05350.6862
TATA -0.0392-0.3847-0.0321-0.0233-0.0121-0.0287-0.0168-0.0365-0.0448-0.0369
M-score -2.57-4.60-1.64-2.88-2.51-2.61-2.49-2.71-2.83-2.04

Coca-Cola European Partners PLC Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.05450.96040.82280.80160.82251.03611.0711.59661.40351.053
GMI 0.97870.96820.96980.97850.99030.98010.96910.97230.96110.9462
AQI 0.99950.96430.95650.98231.03091.02751.02191.32411.24231.2539
SGI 1.0361.06361.02610.96070.91880.82310.83980.95121.19241.4232
DEPI 0.94030.8340.77870.8280.97881.06891.17342.20871.68751.4249
SGAI 0.94730.99591.02920.99971.03051.02461.0581.13281.10171.2148
LVGI 1.06951.11631.14081.10241.07871.05351.00610.69830.6980.6862
TATA -0.0163-0.0387-0.0546-0.0638-0.0845-0.0453-0.0427-0.0172-0.0206-0.0385
M-score -2.51-2.73-2.99-3.07-3.14-2.83-2.76-1.72-1.80-2.05
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